JAKARTA - Indonesian President Joko Widodo said he'll introduce sweeping changes to labour rules by the end of the year and open up more sectors of the economy to foreign investment, delivering on some of the major reforms investors have been demanding.
Businesses have long complained that generous severance packages, a complex minimum wage system and restrictions on hiring and firing workers make it difficult for them to expand operations. So far, smaller rivals like Vietnam are outperforming Indonesia, spurring Mr Joko to enact economic reforms that investors have long been pushing authorities to make.
ECONOMIC ZONES Indonesia restricts foreign investment in a number of industries from banking to brewing. A plan announced back in November to revise the limits and open up some sectors to as much as 100 per cent foreign ownership was delayed following a backlash from local businesses. In a recent World Bank document presented to Mr Joko, none of the 33 Chinese companies that announced plans to set up or expand production abroad between June and August chose Indonesia. They preferred locations such as Vietnam and Cambodia.